Description: The article is about empower-retirement-login in which you will learn what the barriers are that make saving for retirement so difficult. The days of an easy retirement income are fast dying out. Building the pension you hope for takes time. Small changes to your contributions can have a long-lasting effect on your savings.
When you have an important exam and you need a good grade, you prepare for it the day before. You study over time and you get organized in advance. Why don’t we do the same for a test as important as retirement? When we reach old age and retire, we no longer earn the monthly income. We have grown used to that. We must live with the money that we have been able to save which translates into our pension income.
Saving will allow us to maintain our lifestyles after we stop working independently. However although this seems logical in Latin America and the Caribbean. Few people are saving for their future. The truth is that saving seems easy in theory but in practice it is very different.
Because there are many barriers that prevent us from saving. In general people are impatient. An immediate reward is more attractive than a better reward in the future. Social pressure encourages us to make unnecessary purchases instead of saving money.
Work, school, family and friends capture our attention every day and we seldom think about what we will do when we retire. Even if we think about retirement we can have unrealistic ideas like believing we can continue working when we are old or that we will win the lottery.
Given the uncertainty of the future we tend to become paralyzed and do not act. We don’t solve the problem. We postpone it. Therefore we end up arriving at the exam without being prepared. How can we best face this challenge and start saving for our retirement?
Look for automatic saving mechanisms to eliminate temptations. For example each month you can have a certain amount deducted from your checking account and deposited into your savings account for retirement. The most effective way to save is to do it when you receive your paycheck and not after you pay your monthly expenses.
We often believe that the money we get paid is not enough to save. But little by little the piggy bank gets filled. Here’s some important advice. Start saving as soon as possible. Usually half of all pension savings are made in the first 10 years after you start saving. Since the most important exam of your life requires constant work and time. Don’t wait any longer. Start saving.
The days of an easy retirement income are fast dying out. In fact they may already be extinct. Building the pension you hope for is a process that takes time. It can sometimes feel like the small amounts you’re saving today will never amount to the big difference that you’re hoping for in retirement.
But if you’re willing to make small changes to your contributions now, you might be amazed at what your retirement savings could evolve into. Here’s what a person’s pension saving might look like. Over their career starting on an average salary and making contributions required by automatic enrollment.
They could expect a pot of around three hundred and thirty-eight thousand pounds when they retire. It is not bad. But with small sacrifices they could more than double that pot instead of saving five percent of their earnings. They increase this each year.
Six percent in the second year. Seven percent in the third year and repeat these increases for ten years at the start of their savings journey and their pot. By the time they retire they will have more than doubled money. I ask Carolyn Jones, Fidelity’s head of pensions policy what it is going to cost to increase pension contributions in this way.
Saving into your pension earlier can have a dramatic impact on your final pension. It may not cost as much as you think. The government gives you tax relief. If you’re a basic great taxpayer which means that every pound you put in cost you 80 pence and if you’re a higher rate taxpayer the savings are even more and your employer might pay extra in.
You need to look at your employer scheme and they might match your contribution. It’s very easy to do so. If you’ve got a workplace pension, ask your employer to deduct it from payroll. It will come out of your pay either weekly or monthly whenever you paid and if you were lying that change to tax your end or if you have a pay rise, you may not even notice it.
If you’re in a personal pension, you can change your Direct Debit. But bear in mind you can pay a single contribution. If you have some spare money at the end of the year, pop it in your pension. Your retirement savings might start small but adapt your habits and increase your contributions. They could evolve into a completely different animal.